FDI In Oil And Gas Industry— Procedures, Fees And Documents Required

100% FDI is allowed under the oil and gas industry through an automatic route.

100% FDI is allowed in upstream and private sector refining projects through the government route.

Many documents are required for FDI in the oil sector which are as follows:

• List of names, addresses, and identification proof of all foreign collaborators of the investor company/entity
• From both investor/investee entities- Certification of Incorporation and MoA
• Copy of joint venture agreement/ shareholders agreement/technology
• Copy of downstream intimation
• Copy of relevant past FIPB/SIA/RBI joint with the current proposal
• Copy of Downstream Intimation
• An affidavit to ensure all documents are relevant
• Valuation certification approved by a certified chartered accountant
• CS Certificate
• Declaration by the Authorized Representative of the Indian Company/LLP
• Pre and post-shareholding pattern in the Indian company
• Copy of the order of the High Court on the scheme of merger/ demerger/ amalgamation (if applicable)
• RBI approval on the amount of refund concerning the amount of the issue (if applicable)
• Valuation certificate
• Approval letter (if non-compliant with the guidelines – if applicable)
• Relevant RBI approvals for an issue of equity shares against funds payable to the foreign investor
• FIRC/ Debit statement
• Know Your Customer (KYC)

Following are the key advantages derived for investors in India under oil and gas industry:

1. Growing Demand - India's natural gas consumption is predicted to increase by 25 billion cubic metres (BCM), growing at an average annual rate of 9% until 2024. By 2029–2030, India's diesel demand is predicted to double to 163 MT, and by 2045, diesel and petrol would account for 58% of the country's total oil consumption.
2. Rapid Expansion - ONGC declared in May 2022 that it would invest US$ 4 billion between FY22 and FY25 to boost its exploration activities in India. India aims to commercialize 50% of its SPR (strategic petroleum reserves) to raise funds and build additional storage tanks to steep down high oil prices. Further, it declared in May 2022 that it would invest US$ 4 billion between FY22 and FY25 to boost its exploration activities in India.
3. Policy Support - The customs duties on a number of essential chemicals, including methanol, acetic acid, and heavy feedstocks used in petroleum refining, were lowered in the Union Budget 2022–2023. In September 2021, India and the US decided to focus on new fuels in order to improve their energy cooperation.
4. Government initiatives - In an attempt to lower the price of crude oil globally, India declared that it will release 5 million barrels of crude oil from its strategic petroleum reserves. This closely corresponds to the nation's daily consumption. Moreover, the government adopted modifications to the Biofuel Policy that will move the aim of 20% ethanol blending with petroleum from 2030 to 2025-26.

Following are the benefits of FDI which has been derived for investors in oil and gas industry:

1. Gateway to expertise - FDI in the oil and gas industry ensures the accessibility for extracting crude oil, coal and petroleum at less cost and unconventional ways in offshore environments. This ensures sustainable exploitation practices which is also important while deriving valuable resources for keeping other valuables safe.
2. Create new job prospects - The job which is generated from the particular industry generally helps investors to phase on the safe side while investing in massive capital investment. The direct and indirect jobs offered in the oil and gas industry helps to curb large unemployment outbreaks in the country.
3. Global market access without constraints - FDI in the oil industry helps to deal in fair agreement through visioning balance in potential exploration and development for securing a stable supply chain without facing any further constraints regarding depletion of resources.
4. Infrastructure development - The development possessed by the oil industry requires efforts to generate. This also necessitates continuous power supply to channelize the valuable resources to concerned demanding demographics so as to ensure supply chains across the global market. With an aid of pipelines, ports and terminals, and power generation, the development of infrastructure development may be enhanced by adopting sustaining practices.

Several other factors to consider for investors while investing in medical industries are listed below:

• Before involving huge investments, applicants must be prerequisites to check the kind of companies the government allows them to invest in. Because investment in the stock market is volatile and may not recover your loss, leading to unwriggled investment which will not recover at the time of redemption of company loss.
• Additionally, before application applicants need to inspect and ensure that all the requisite documents are submitted online without discovering any omissions and incorrect information within the documents. FDI is largely inspired to bring investors forth along with certain advantages that benefit sectors.

To energize the growth of the nation market to reach at the global summits, FDI in the oil industry boosts the adoption of sustainable practices such as renewable energy that have potential to bring a sharp factor to facilitate import and export of oil industry and its associated benefits. The supportive ecosystem of government policies is continuously working out to accelerate the performance of the oil industry by introducing additional reforms, schemes and initiatives to make these industries grow at a rapid pace.